Royal Baby Worth $376 Million to the British Economy

Raj Solomon, proprietor of Piccadilly Cards, a thin sliver of a store flogging souvenirs opposite the Royal Academy of Arts in central London, is expecting a lucrative summer.

During the Jubilee celebrations last year he could barely keep pace with the demand for Queen Elizabeth II key rings and tea towels. Next month, with the expected birth of Britain's heir to the throne, it will be coats of arms pacifiers and "I love my Uncle Harry" bibs. "Everyone's waiting for that baby," says Mr. Solomon happily.

The firstborn of Prince William and the Duchess of Cambridge is due in July. During that month and until the end of August, British retail sales will get a £243 million ($376 million) boost, predicts the Centre for Retail Research. Its report, published last month estimated that Brits will spend an extra £62 million ($94 million) on alcohol and £80 million ($121 million) on souvenirs and toys in two months.

Even weeks before the baby's due date, barely an opportunity has been missed to cash in on his or her imminence.

Butter London, a high-end cosmetics brand, has put out a $20 nail varnish called Pitter Patter. Across the country, hotels and restaurants are offering Royal Baby showers designed to make pregnant women feel like duchesses. The shop at Highgrove, Prince Charles's home, is selling handmade leather baby shoes at $34 a pair.

"We didn't experience such excitement when William was born in 1982 and certainly not when Prince Charles was born in 1948," says Joe Little, managing editor of Majesty magazine. "I think it's the great immediacy it all has now, thanks to the Internet."

Indeed Joshua Barnfield, director of CRR, says he estimates Brits "will spend three or four times more than at the births of Prince William and Harry."

Patriotism, Consumerism

The Internet, with its speedy dissemination of information and selling power is one reason for the big spending. Another is a resurgence of interest in the royal family following the marriage of Prince William and Kate Middleton in 2011. Their low-level glamour and evident happiness has made them—along with Prince Harry, who has shown a surprising flair for international diplomacy—the most popular royals in years.

The wedding, and the following summer's celebrations for Elizabeth's 60 years on the throne, showed off the spectacular pomp at which Britain still excels.

Months later the 2012 Summer Olympics, followed by the most watched Paralympics in history, heightened the patriotic mood. At a time when post-empire Britain has little to distinguish it from other countries, patriotism and support for the royal family are easily conflated in the popular imagination.

"We do a lot of research into consumer behavior and there is an increasing tendency to celebrate things these days," says Mr. Barnfield. "If someone had a party to mark a royal baby's birth in the '70s or '80s people would say, 'Er, why are you doing that?'"

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Pauline Maclaren, professor of marketing and consumer research at Royal Holloway College at the University of London, is writing a book on consumers and the branding of the royal family which will be published by California University Press next year.

She says while serious collectors of memorabilia are probably royalists, "a lot of people are just buying these things for fun. It's seen as part of being British rather than any more serious support of the monarchy."

Cashing in?

One company likely to do well out of the birth is Party Pieces, owned by Kate's parents, Carole and Michael Middleton, which has revamped its website, adding a "baby arrival" range with blue and pink balloons and rattles.

This has prompted many newspaper headlines suggesting the Middletons are exploiting their grandchild's bloodline.

But with both Highgrove and the Royal Collection—which pumps profits into the upkeep of the royal palaces and is offering a $20 guardsman onesie—also selling baby paraphernalia, it would be unfair to lay all the blame for commercializing the birth at the doors of the Middletons.

"The Royal Collection does things in a rather more subtle style than some sellers," says Mr. Little of Majesty magazine. "It will, I am sure, produce commemorative china, but using coats of arms rather than the faces of William and Kate."

Will Oliver | AFP | Getty Images

Souvenir mug celebrating the upcoming royal baby

But any suggestion that the royal family feels the Middleton family is overstepping the mark he attributes to "media mischief. There will always be people who wish to remind us of Kate's middle-class background."

Partying and commemorative china aside, the royal birth is likely to impact sales in other sectors. Just as dresses, especially maternity dresses, have sold out as Kate Middleton has been snapped wearing them, so sales of whatever buggy the third in line to the throne goes out in are expected to soar.

The betting business, which tends to do well at big national events, has a protracted selling window with a royal birth, thanks to bets placed on names. Alexandra and George are currently in the lead, while bets are also being placed on the baby's hair color (brown, unsurprisingly, is ahead).

'Free Publicity for Britain'

Tourism, too, will get a big boost from overseas visitors curious about the kinds of people who inhabit castles. "The royal family generates free worldwide publicity for Britain—you can't put a value on that," says Patricia Yates, director of Strategy at VisitBritain, the tourism agency.

Then there is the more general boost that the birth is likely to give the economy, boosting the confidence of consumers and investors.

A government study published this month suggested last summer delivered £2.5 billion ($3.9 billion) in foreign direct investment resulting from business events launched during the Olympics.

"The economy is already improving," says Barnfield. "The birth will be another uptick in the right direction."